Among them, private consumption, which accounts for more than half of Japans GDP, fell 0.7% on a month on month basis, while economists expected it to fall 1.6%. Household consumption spending has fallen for the second consecutive quarter, hit by a combination of the coronavirus and a rise in sales tax in October last year.
Data show that business investment in Japan fell in the first quarter Zero point five %, while the median is expected to decline One point five %, has also declined for the second consecutive quarter.
The latest figures also highlight the turmoil in Global trade, with exports down 6% in the first quarter and imports down 4.9%.
Combined, domestic demand reduces GDP growth Zero point seven Percentage points, while external demand decreased Zero point two Percentage points.
Q2 data or worse
Analysts expect Japans economy to contract 21.5% in the second quarter, the lowest since data began in 1955.
The current stimulus package, which includes cash payments to households, has exceeded 20% of Japans GDP.
Businesses have just begun to reopen in a small number of Japanese cities, and the drop in infections has lifted last weeks emergency. However, in economic centers such as Tokyo and Osaka, commercial activities are still basically frozen, which will be further restricted in the future.
Demand for Japans exports is likely to remain subdued for a long time, as progress may be sporadic, although the US president and other leaders are discussing how to reopen their economy.
At home, even after the emergency is lifted across the country, spending is unlikely to pick up quickly, because people may still be cautious about going out and taking risks, and families may still tighten their wallets to cope with declining incomes and more volatile job markets.
After the first quarter, high-frequency indicators show that the pace of Japans economic contraction accelerated further in the second quarter, as the emergency announced in early April hit economic activity. However, consumer spending is likely to get some support as Japanese households will begin to receive 13 trillion yen (about $120 billion) checks from the government this month. According to economist Yuki masujima.